New car depreciation question

[CT Yankee]

I often hear people say that they do not purchase new vehicles because they depreciate in value so quickly. That's a fair assessment. My question is, if you plan on holding on to the new vehicle for a long time, does the rapid depreciation of that vehicle actually matter, since you don't plan on selling or trading it in anytime soon? We typically (but not always) purchased new vehicles and kept them for about ten years. We also purchase the gap coverage if we have to finance the vehicle. My husband works for an insurance company that offers a very good employee discount, so we get a good price on the premium for this product.

 

[robinb]

We don't worry about depreciation and all but 2 of our cars have been new. The 2 used cars were 50/50 on reliability. The first, a Saab 9-5 (to replace a previous 9-5 that was totaled while a friend was driving it), ended up to be a real lemon that we traded in as soon as it was out of warranty. The second was a Subaru Outback that was great until it too was totaled (my DD was hit by someone on a mountain pass). It was such a great car, we bought a brand spanking new Outback to replace the totaled one.

Our current driver is a 2018 Honda Clarity with 96,000 miles on it and it's a solid car that we bought new. I'd buy another new one in a couple of years, but Honda discontinued them .

 

[808blessing]

I always buy used. Then sell about 10 years later. Depreciation hits you any way you look at it. Just less with resale. Saab's have a bad repair reputation...so if you pick a used reliable with good history you should be ok. My first car ever was brand new. Won't do that again unless I'm loaded.

 

[tvguy]

Well, to my way of thinking, I MIGHT consider depreciation if I kept my cars for ONLY 10 years. My current car will be 8 years old in June, I traded in a vehicle I had for 31 YEARS. My wife's car will b 6 years old in July, we traded in a car we had 20 YEARS. But we are in California a rust is not an issue. As for upkeep costs, I added up all the receipts on the vehicle I had for 31 years and spent a few dollars over $10,000 on repairs and upkeep. Or about what you lose in depreciation the minute your drive a new car off the lot.
Another thing I do not consider is whether the cost of repairs exceeds the value of the vehicle. The last two sets of tires on the vehicle I had 31 years cost more than it was worth if I was going to sell it. Only exception to that would be collision damager. When my daughter rear ended someone and crunched the front of a car we had owned for 18 years, I did not even get a repair estimate, it went straight to the junkyard.

 

[RivShore]

I often hear people say that they do not purchase new vehicles because they depreciate in value so quickly. That's a fair assessment. My question is, if you plan on holding on to the new vehicle for a long time, does the rapid depreciation of that vehicle actually matter, since you don't plan on selling or trading it in anytime soon? We typically (but not always) purchased new vehicles and kept them for about ten years. We also purchase the gap coverage if we have to finance the vehicle. My husband works for an insurance company that offers a very good employee discount, so we get a good price on the premium for this product.

We do something similar, buy a new reliable car and hold 10 to 15 years, getting rid of it once repair and mantinance costs start climbing. I have always figured everything nets out the same vs buying say a used 3 year old car, which will need to gotten rid of 3 years sooner. Plus with a new purchase, your also getting the latest safety and tech features (for instance, I can't live without wireless CarPlay after getting it on our new 2024 purchase).

 

[barkley]

we buy our vehicles and drive them until there's an issue that's no longer cost effective to repair so we hold on to them a good long time. for us it's never been a consideration of what the value of the vehicle would be down the line but moreso what the cost is now/does it meet our needs. when we were daily commuters we were putting allot of miles on them and needed reliabilty which we infrequently saw with used (generally inheriting someone else's issues unless it was the RARE case with a great deal on a very low mileage-aka 'the little old lady who just drove it to church on sundays' ).

it may make a difference for us in that we tend to pay cash for our new vehicles (except for our most recent which we paid off in a year b/c the interest rate offered was lower than what we were getting on the bank account we would have pulled the funds from).

 

[barkley]

Plus with a new purchase, your also getting the latest safety and tech features (for instance, I can't live without wireless CarPlay after getting it on our new 2024 purchase).

that's an aspect I hadnt thought of-insurance. we had a 2006 that reached the end of it's life at the end of 2024 so that's when we bought our newest. I just assumed that the newer/higher value vehicle would increase our insurance but no, with the newer safety features our insurance decreased so that's a long term cost factor as well.